UiPath's (PATH) Growth Potential in the RPA Sector: Is RBC Capital's $12 Price Target a Signal of Undervaluation or Cautious Optimism?

UiPath (PATH) has long been a bellwether for the robotic process automation (RPA) sector, and its recent performance has sparked renewed debate about its valuation. As of September 19, 2025, the stock closed at $11.87UiPath Inc (PATH) Share Price, Stock Analysis, Annual Report^[3], hovering near RBC Capital's $12 price target while diverging from the broader analyst consensus of $18.71UiPath (PATH) Stock Forecast and Price Target^[2]. This divergence raises a critical question: Does RBC's cautious “Sector Perform” rating reflect undervaluation, or is it a hedge against market volatility and strategic uncertainties?

Stock Price Volatility and RBC's Evolving Stance

UiPath's stock has exhibited notable volatility in recent weeks. Over the past five trading days, it surged 6.8%, climbing from $10.83 on September 5UiPath Stock Price | PATH Stock Quote, News, and …^[5] to $11.81 on September 17UiPath (PATH) Stock Forecast and Price Target^[2]. This rally coincided with RBC Capital's reaffirmation of its $12 target on September 5RBC Capital Reaffirms Its 'Sector Perform' Rating on UiPath Inc.^[1], a figure that now appears within striking distance. However, RBC's stance has not been static. Earlier in 2025, the firm lowered its target from $16 to $13UiPath Stock Price | PATH Stock Quote, News, and …^[5] due to mixed fiscal performance and federal business uncertainties, only to raise it again to $15UiPath (PATH) Price Target Raised by RBC Capital Following Stable Quarter^[4] following improved financial stability and progress in agentic automation.

This oscillation underscores RBC's cautious optimism. While the firm acknowledges UiPath's 6% year-over-year revenue growth and 12% ARR increaseUiPath (PATH) Price Target Raised by RBC Capital Following Stable Quarter^[4], it remains wary of macroeconomic headwinds and competitive pressures in the RPA space. The $12 target, therefore, seems calibrated to balance UiPath's fundamentals with sector-wide risks.

Analyst Consensus vs. RBC's Pragmatism

The broader analyst community is more bullish. Seventeen Wall Street analysts average a $13.18 targetUiPath (PATH) Stock Forecast and Price Target^[2], with some, like BMO Capital and Truist, recently lowering their estimates to $12.50 and $12, respectivelyUiPath Stock Price | PATH Stock Quote, News, and …^[5]. Meanwhile, the consensus “hold” ratingUiPath (PATH) Stock Forecast and Price Target^[2] suggests a wait-and-see approach, as investors weigh UiPath's strategic bets against execution risks.

RBC's $12 target, while modest, aligns with this cautious sentiment. However, the firm's recent upward revision to $15UiPath (PATH) Price Target Raised by RBC Capital Following Stable Quarter^[4]—triggered by UiPath's 83.09% gross margin and momentum in agentic automationRBC Capital Reaffirms Its 'Sector Perform' Rating on UiPath Inc.^[1]—hints at untapped potential. Agentic automation, which enables AI-driven workflows, has already driven larger deals and broader use casesRBC Capital Reaffirms Its 'Sector Perform' Rating on UiPath Inc.^[1], positioning UiPath to capture a larger share of the RPA market.

Financial Fundamentals and Strategic Momentum

UiPath's financials provide a mixed picture. The company's 12% ARR growthUiPath (PATH) Price Target Raised by RBC Capital Following Stable Quarter^[4] and strong gross marginsRBC Capital Reaffirms Its 'Sector Perform' Rating on UiPath Inc.^[1] highlight its ability to monetize its platform. Yet, its $6.27 billion market capUiPath (PATH) Stock Forecast and Price Target^[2] lags behind peers like Automation Anywhere and Blue Prism, suggesting room for expansion. The key question is whether agentic automation can translate into sustained revenue growth.

RBC Capital's analysts argue that UiPath's early customer adoption of agentic toolsUiPath (PATH) Price Target Raised by RBC Capital Following Stable Quarter^[4] is a positive catalyst. By automating complex, unstructured tasks, the platform could unlock new revenue streams in sectors like healthcare and finance. However, scaling this technology without compromising margins remains a challenge.

Undervaluation or Cautious Optimism?

The $12 price target sits at a crossroads. On one hand, UiPath's current price of $11.87UiPath Inc (PATH) Share Price, Stock Analysis, Annual Report^[3] implies a slight undervaluation relative to RBC's revised $15 targetUiPath (PATH) Price Target Raised by RBC Capital Following Stable Quarter^[4], particularly given its financial stability and strategic advancements. On the other, the broader analyst average of $18.71UiPath (PATH) Stock Forecast and Price Target^[2] suggests that RBC's caution may underestimate the stock's upside.

Investors must also consider macroeconomic factors. A potential slowdown in enterprise IT spending could temper demand for RPA solutions, while regulatory shifts in AI governance might impact agentic automation's adoption. RBC's “Sector Perform” ratingRBC Capital Reaffirms Its 'Sector Perform' Rating on UiPath Inc.^[1] reflects these uncertainties, positioning UiPath as a defensive play rather than a high-growth bet.

Conclusion

UiPath's $12 price target from RBC Capital appears to strike a balance between its current valuation and future potential. While the stock's proximity to this target suggests a modest undervaluation, the firm's cautious stance—rooted in sector-wide risks and strategic uncertainties—cannot be ignored. For investors, the path forward hinges on UiPath's ability to scale agentic automation and maintain its financial discipline. If successful, the stock could outperform RBC's target, but until then, “Sector Perform” remains a prudent benchmark.